More than one offer: Which to accept?

What to do when your property is resoundingly popular? Even if the potential buyers are over eager, there’s no reason to rush your decision. It’s entirely possible to receive several offers to purchase at once, and you are in no way obligated to answer them right away.

Summary:

• Acceptance period
• Order of priority when receiving several purchase offers
• Can a seller accept more than one offer?
• Verbal acceptance

Acceptance period

The deadline for accepting an offer to purchase a property can vary, and generally depends on the negotiations between the buying and selling parties. There is no specific time limit imposed by law, but it is part of the terms negotiated when the offer to purchase is drawn up. It is essential to clarify this deadline in the offer to purchase itself, to avoid any confusion.

In practice, a typical acceptance period is between 24 and 72 hours. This means that the seller has this time to accept, reject or make a counter-offer to the buyer. However, this period is flexible and can be modified according to the circumstances and preferences of the parties involved.

Order of priority when receiving several purchase offers

During this cooling-off period, you may receive further promises to buy. What should you do? You may choose to negotiate or outbid them. As long as no offer to purchase is accepted, potential buyers will be able to increase their price or modify their conditions of purchase. In other words, there is no priority for the first offer received, or for the offer with the highest price. The final choice is yours.

When a seller receives several offers to purchase a property, he or she can use several criteria to determine the order of priority of each one. Here are some of the factors that may influence his or her decision:

1. Price offered: The price offered in the bid is often one of the main criteria. A higher price may be more attractive to the selling party.
2. Offer conditions: The conditions included in the offer, such as inspection deadlines, financing terms and other contingencies, can play a role. An offer with fewer conditions may be perceived as more solid.
3. Closing date for signing the deed of sale: Depending on their situation, some sellers may prefer an offer with a shorter closing time, while others may need a longer one.
4. Pre-approved financing: If the buying party has already obtained mortgage pre-approval, this can reassure the selling party about the buyer's financial capacity to close the deal. However, pre-approval is not sufficient for the financing condition to be fulfilled; the buyer must provide the seller with final, unconditional approval.
5. Flexibility: Flexibility on certain aspects, such as the closing date of the deed of sale or other conditions, can also be a factor.
6. Personal preferences: The desire to sell to a family rather than an investor, for example, may influence the decision.

Can a seller accept more than one offer?

In Quebec, it is common practice for the selling party not to accept several offers simultaneously, unless a specific provision to this effect is included in the conditions of sale. This is often regulated by the concurrent acceptance clause.

If the selling party receives offers within a short period of time, he is in a multiple-offer situation. He must choose a single offer and keep the contact details of the other buyers if the chosen offer does not materialize. She can also accept a second offer conditional on the cancellation of the first for non-fulfilment of the conditions. Each subsequent offer is conditional on the cancellation of the previous offers. The buyer must know what position he or she is in. Transparency and good faith are essential.

When the selling party receives a second offer and the first offer, which has been accepted, is conditional on the sale of the property to the first buyer, the 72-hour clause applies. If there is no condition of sale, the second offer may be accepted by the seller and will be conditional on the cancellation of the first offer already accepted. In this situation, the second buyer waits for the seller to notify him, within the timeframe specified in the offer to purchase, whether the first offer has been cancelled or maintained.

In short, the selling party has the right to accept several offers, but concurrently, not simultaneously. Each offer is conditional on the cancellation of the previous offer. The parameters must be clearly defined in each offer to purchase.

Verbal acceptance

Knowing that other buyers are already interested in your property, a visitor may be quick to make you an offer and ask for a response on the spot. Remember, the contract is formed as soon as you accept the offer to purchase, even if only verbally.

In other words, if you agree on the sale price and the conditions of the offer to purchase, the contract exists. If all the conditions are met, you are obliged to go to the notary to conclude the transaction. The written offer to purchase represents proof of this contract, for example when the buyer applies for mortgage financing.

Consequently, it's not advisable to accept a verbal offer to purchase until you're certain that the proposal is right for you. In a context of multiple offers, agreeing with buyers on a response time will enable you to analyze the different offers on the table and make a well-considered decision.

If you receive a second offer but have already accepted the first one, the 72-hour clause may apply if this first offer is conditional on the sale of the first buyer's property.

Looking to sell a property? Our team of customer service advisors, sales representatives, real estate coaches, appraisers and notaries is located throughout Quebec. With DuProprio, you have access to the visibility and support you need to succeed in your sales project! Learn more about our services by watching our short video or by calling us at 1-866-387-7677.